Ask The Experts: Retirement

By Reg Jones

CSRS offset and not collecting Social Security

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Q. I am under CSRS offset. I am going to retire in three years at age 62. I know my government pension will be reduced by $213 when I turn 62. According to my Social Security statement, I should receive $888 if I collect at age 62. It states: “At your current earnings rate, if you continue working until 66, you will receive $1,366 a month.” What happens if I don’t collect Social Security at age 62 and wait until full retirement age? Will I receive $1,366 a month minus the $213 offset reduction, minus the windfall elimination provision? (I will have only 20 years under Social Security.) Or will the $1,366 be recalculated since I won’t be paying Social Security from age 62 to age 66? Also, I am divorced and not remarried. My ex-spouse is retired military and under FERS. He has remarried, but I am still entitled to his Survivor Benefit Plan under his military retirement plan. If something happens to him and I start receiving SBP, will my Social Security be affected?

A. The offset to a retiree’s CSRS annuity occurs at age 62 or when he retires, if it’s after age 62. It makes no difference if the retiree applies for a Social Security benefit. The reduction is automatic. On the other hand, the windfall elimination provision is only applied when the retiree applies for a Social Security benefit.

You can estimate the offset’s effect using the following formula: Take your Social Security benefit estimate, multiply it by your total years of CSRS offset service rounded to the nearest year, and divide the product by 40.

You can get an idea of how the WEP would affect you by going to http://ssa.gov/pubs/10045.html.

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